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Switching From PTA to PTO

Key steps if your group is planning to change from a PTA to an independent PTO.

PTA to PTO

Every year, lots of groups decide to drop their affiliation with the National PTA and become independent PTOs. Among the most common reasons that groups change: They want to keep their dues money at home; they disagree with or don’t want to support the PTA’s lobbying positions; or they want the independence to run their group in their own way, free of required PTA bylaws and rules.

In fact, there are more than twice as many independent PTOs in the United States as PTAs. So for groups thinking of breaking away, you are not alone. Tens of thousands of parent groups have taken the independent route with great success.

Switching from PTA to PTO involves two processes performed at the same time: closing your PTA unit and starting a PTO. Because your PTA is organized under the National PTA’s umbrella, you can’t necessarily just vote to become independent. There are a few official steps that should be followed.

Making the Switch

Because there are several steps involved in both starting your PTO and disbanding your PTA, it makes sense to be fairly confident that your group leadership and your general parent population is supportive of the change before you start the process. Some research, good communication, and open discussion is usually enough to determine informally if a change is likely to be supported. If so, then the next steps are fairly clear.

Step one is to get an employer identification number (EIN) for your PTO. An EIN, which some people call a “tax identification number,” is the way the IRS keeps track of businesses. It doesn’t mean that you have to be an employer. Obtaining an EIN is an easy process that establishes your PTO as a separate, independent organization. Just download Form SS-4 from www.irs.gov or fill it out online. It will only take a few minutes.

Next, draft a set of bylaws for your PTO. You can base them on your PTA bylaws, but you now have the freedom to organize your group in whatever way works best for you. If you don’t want to charge dues, you don’t have to. If you want to change the board positions, you can do it. It helps to read other groups’ bylaws. There are lots of bylaws examples on the File Exchange, including a sample set of basic annotated PTO bylaws. Don’t forget to include a clause on how to amend your bylaws in the future.

While you’re organizing your PTO, begin the process of closing your PTA. You’ll need to hold a vote of the executive board. If your board decides to move forward, schedule a general meeting. This isn’t a decision to spring on your members; take some time to build awareness and support before moving forward. You’ll typically need a two-thirds vote at a general meeting (check your current PTA bylaws) to dissolve your PTA unit.

This is a good time to check your state PTA’s bylaws. They include some procedures for dissolving your PTA unit. Among them, you’ll most likely be asked to notify the state PTA by certified mail that you plan to close.

The final step is to hold a general meeting and take the vote. Be sure to give members plenty of notice. You can run this like a regular meeting with an abbreviated agenda: whether or not to dissolve the PTA. If you expect a lot of discussion, limit comment time to 30 seconds or 1 minute per person. It’s also acceptable to put an overall time limit on discussion, say 30 minutes. At some point people will start to repeat each other and you will have heard all of the arguments on each side. In some states, you may be asked to let a representative of the state PTA speak. If you elect to do so, have her talk at the beginning of the discussion and place a time limit on her presentation. Five minutes should be sufficient. Once discussion has ended, take the vote. If it comes out in favor of dissolving, simply announce the result and adjourn the meeting.

What About the Money?

One of the most common questions groups have is what to do with money that remains in your PTA bank account when dissolving a PTA. The simplest recommendation is to have as few dollars as possible in your treasury before taking a formal disband-or-don’t-disband vote. In that way, if your group votes to disband, then there is very little to worry about financially (one less complication)—and if you vote not to disband, then you can just return to business as usual. For most groups, spending the treasury down to near zero is a matter of spending dollars on items that you typically support (teacher stipends or field trips or purchases for school, etc.) while perhaps postponing one fundraiser until after your vote. It’s also allowable for 501(c)(3) groups to donate funds to other tax-exempt organizations.

Building Your PTO

Once the bylaws are written for your PTO, you’re ready to hold your first meeting and elect officers. In many cases these are the same officers who have been leading the PTA, but they don’t have to be. By the way, it’s perfectly OK to operate a PTO and a PTA at the same time while you’re making the change.

As you move forward, you will most likely want to put some more formal structures in place, including incorporating and obtaining tax-exempt status. Incorporation is done through your state, usually the state corporations office or the secretary of state. Becoming tax-exempt under section 501(c)(3) of the federal tax code requires filling out a fairly detailed form with the IRS. You have 27 months from your startup date (or incorporation date) to file, and approval is retroactive. PTO Today’s PTO Startup Toolkit walks you through the form question by question. We’ve spent many hours talking directly with the IRS to make this process easier for PTOs. There’s a one-time fee of $850 to apply for 501(c)(3) status, or $400 if your gross annual receipts are less than $10,000.

If your group was purchasing insurance through the PTA, you’ll need a new policy. You can get PTO insurance coverage through the PTO Today Plus program at a significant discount over typical rates for individual groups. We recommend that all parent groups look into insurance options. Your school’s policy may not cover your group; it’s important to find out for sure.


We’re Here To Help

For more information on getting your PTO up and running, read How To Start a PTO. This article is aimed at leaders starting from scratch and might include more information than you need. However, it offers links to lots of helpful resources on ptotoday.com. Also, PTO Today’s PTO Startup Toolkit walks you through the nuts and bolts of getting started, writing bylaws, incorporating, and applying for tax-exempt status.

Good luck as you research the change and move forward. We’re here to help, whether your group becomes a PTO or remains a PTA. We have lots of resources, most of them free, and they’re all at your disposal. We have more than 700 articles on parent group topics, and we’re constantly adding more. There are lots of experienced parent group leaders happy to lend advice on the message boards, and the File Exchange has hundreds of shared files uploaded by parent group leaders. Parent Express Email is a free, easy-to-use program that allows you to send email newsletters, flyers, and the like to your group. Our free School Family Nights planning kits offer step-by-step directions and fun activity ideas for great family events. And PTO Today Expos give you the opportunity to connect with a wealth of vendors providing goods and services specifically aimed at PTOs and PTAs.

Both PTOs and PTAs do important work for their schools. It’s the leaders and volunteers who make the difference, not the acronym.

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Comments

  1. Posted by - Vicki on Jul. 06, 2013

    At the present time we are experiencing difficulting getting parents to attend meeting so we can vote on things. We did discuss changing to a PTO. Since we do not have parents attending the PTA now, can the motion that we made to change to a PTO be the final decision? We have around $15,000 in the PTA account. Should I apply for a EIN, write new by-laws, file for the 501C tax exempt status, and move all fund to the new accounts once we get
  2. avatar

    Posted by Rose C on Mar. 11, 2013

    Hi Lauriec -- You may want to check your state bylaws or call into the state office (if your relationship there is positive/productive). Beyond that, I suspect that what you actually vote on at your first meeting matters quite a bit. If you vote to disband right then, then your group is likely done right then. I think it would be a lot cleaner to make sure your funds are at/near zero before taking that formal vote. Given that it's only a month or so, it shouldn't be too hard to pay a few expenses early. Not sure if it's possible to phrase your motion as "move to formally disband our unit on XYZ date (in future) after we've taken care of financials". I haven't seen that done. Good luck.
  3. Posted by - lauriec on Mar. 10, 2013

    Question---we will take our vote to disband our PTA & start our PTO at our May meeting. School gets out 2 weeks later & our fiscal year ends on July 30th. Is it possible to vote at the meeting to allow us to have until 30 July to spend down our money?
  4. Posted by - lisa on Feb. 05, 2013

    i just have a question. If we disband our pta, do they have the right to take all our stuff. Things like our fall festival items that we did not purchase they were donated by parents. Other things like popcorn machine and things we have bought that our children raised the money for.
  5. avatar

    Posted by Rose C on May. 29, 2012

    Hi Linda, We have lots of resources here on our site, like this great comparison chart that, at a glance, gives you a good sense of the differences -- http://www.ptotoday.com/pto-vs-pta-differences-at-a-glance.

    We unfortunately don't have someone who could travel to you. But we are here if you wanted to reach out with additional questions.

    Also, if you have specific questions, you can post them on our message boards and get responses from other PTO leaders --http://www.ptotoday.com/boards -- and another great spot is our Facebook page, where lots of parent leaders and volunteers exchange information -- http://www.facebook.com/PTOToday.

    Good luck and stay in touch! Rose C.
  6. Posted by - Linda on May. 29, 2012

    Can we have a rep. come out an educate us on PTO vs. PTA
  7. Posted by - Linda on May. 29, 2012

    is there a way we can have a rep come out and talk to us???
  8. avatar

    Posted by Rockne on May. 24, 2012

    Hi AJ -- That's a frequent question. I've personally never heard of things coming to that, though I have heard it mentioned/threatened. It is OK for a 501c3 to donate to another 501c3 or even to your school, so if you have major fears about that you could make those donations (to the school, for example) before formally dissolving. In the case of the popcorn machine, for example, it likely doesn't make too much of a difference whether it's technically owned by the school or your group, as long as there's mutual understanding as to how it will be used. And things like your bingo cards I'm not even sure would be considered formal assets. I can't imagine they qualify as such on your tax filings, etc. Tim
  9. Posted by - AJ on May. 24, 2012

    Our PTA is thinking of changing to a PTO. I checked with our state's PTA bylaws and it says the following

    "In the event of surrender or withdrawal of its charter by National PTA, Oregon PTA is obligated:
    a. To yield up and surrender all of its books and records and all of its assets and property to National PTA"

    Does this mean that can take things like our popcorn machine, bingo cards, ie: items our current PTA uses for fundraising?
  10. avatar

    Posted by Craig on Jan. 11, 2012

    Pres. -- PTAs that belong to the National PTA are covered by the parent organization's 501c3 status. It's part of what you get for your annual dues.
  11. Posted by - Pres. on Jan. 11, 2012

    If we are already a PTA, don't we already have 501 (c) (3) status?
  12. Posted by - Kerri Moeller on Aug. 11, 2011

    I have been the PTA President for a few years. At the present time we are experiencing difficulting getting parents to attend meeting so we can vote on things. We did discuss changing to a PTO. Since we do not have parents attending the PTA now, can the motion that we made to change to a PTO be the final decision? We have around $15,000 in the PTA account. Should I apply for a EIN, write new by-laws, file for the 501C tax exempt status, and move all fund to the new accounts once we get the new EIN number.
  13. avatar

    Posted by Rockne on Aug. 05, 2011

    Hi Joelie -- Don't have a sample on that, but I wouldn't over-engineer it. Keep it very simple.
  14. Posted by - Joelie Key-Tissot on Aug. 04, 2011

    To dissolve our PTA we need to write a resolution. Do you have any sample resolutions from PTAs who have dissolved?
  15. avatar

    Posted by Rockne on May. 04, 2011

    Hi Kelly - Legal? Yes, i think so. But maybe not necessary or recommended. Because the remaining budgets are usually low, it might be easier/wiser to just spend down to zero or donate the funds to the school before disbanding your PTA. A ton on these topics here: http://www.ptotoday.com/pto-vs-pta
    Tim
  16. Posted by - Kelly on May. 04, 2011

    We are a PTA and are planning to switch to a PTO. If we set up our PTO then "donate" the PTA funds to the PTO, is that legal?? It is a tax-exempt donation.
  17. avatar

    Posted by Rockne on Mar. 28, 2011

    Hi Kendall - That's somewhat up to your state's bylaws. There are often notification requests/expectations. My recommendation is to avoid sending any formal notification ("we are domg x, y or z") until you've done all your homework and prepared as you see fit. Of course, if you have questions for the state PTA or would like them to discuss options or why you should stay a PTA, you should be able to do that without any formal process. Tim
  18. Posted by - Kendall on Mar. 28, 2011

    Is there a letter that needs to be sent to the PTA when we are discussing switching from a PTA to PTO? Do you have an example? thanks
  19. Posted by - Joan Knight on Jan. 17, 2011

    I request a contact for the MN PTO in the Twin Cities metro.
    My phone is 763 205 2720. This is about a children's coalition.
  20. Posted by - Joan Knight on Jan. 17, 2011

    I would like to contact and to speak with a PTO leader or administrative person in the Twin Cities, MN about a children's coalition topic.
  21. Posted by - joan Knight on Jan. 17, 2011

    I would like to speak to a PTO leader or administrative person in the Twin Cities, Minnesota about a children's coalition topic.
  22. Posted by - joan Knight on Jan. 17, 2011

    I would like to speak to a PTO leader or administrative person in the Twin Cities, Minneapolis.
    My phone number is 763 205-2720
  23. avatar

    Posted by Craig on Sep. 27, 2010

    No. Even though you're essentially just withdrawing from the PTA, in a legal sense you are closing one organization and starting a new one. That means you need to get a new EIN (Employer Identification Number) from the IRS (IRS form SS-4) and apply for tax-exempt status by filling out IRS form 1023. If you have an exemption from state sales tax, you probably will need to reapply for that as well. Check with your state tax office.
  24. Posted by - mary gallagher on Sep. 27, 2010

    Can I get a phone number to talk to a person who can talk to me with questions I have?
  25. Posted by - mary gallagher on Sep. 27, 2010

    Can a PTO use the same tax exempt number as the PTA had. when changing from PTA to PTO?

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